State Street Starts Direct Access Lending
State Street Corporation on Friday launched Direct Access Lending, a securities finance product that enables direct, principal loans between its lending clients and its borrowing clients.
The new managed peer-to-peer product will leverage the strength of State Street’s Agency Lending and Enhanced Custody programs and underscores a continued focus on aligning solutions and technology across State Street to help clients achieve their objectives.
«Over the last decade, we have worked hard to manage balance sheet constraints across banks and broker/dealers participating in securities lending,» said Martin Tell, global head of Securities Finance at State Street in a media statement.
Adding New Markets and Collateral Types
«State Street has created a number of innovative solutions to support our clients, expanding our program to add new markets and collateral types and diversifying methods for borrowers to post noncash collateral by pledging securities instead of a title transfer. With this prior innovation and development, we are uniquely positioned to create a peer-to-peer securities finance platform given the scale and sophistication of the Agency Lending and Enhanced Custody businesses that we run today,» said Tell.
To facilitate the direct lending transactions, State Street will leverage both its Agency Lending and Enhanced Custody programs to offer both sets of customers the benefits of each program required to operate in a peer-to-peer transaction while also enjoying an economic benefit associated with Direct Access loans. The product offers a seamless peer-to-peer model, supported by the operational efficiency and expertise of a managed securities lending program.
State Street’s Global Markets team provides specialized research, trading, securities finance and innovative portfolio strategies to owners and managers of institutional assets. Its goal is to enhance and preserve portfolio values for clients through original flow-based research, proprietary portfolio and risk management technologies that optimize trading.
